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Microcap & Penny Stocks : How you help market makers short your stocks !!! -- Ignore unavailable to you. Want to Upgrade?

To: TraderGreg who wrote (7)	2/2/1998 7:11:00 PM
From: Ditchdigger	Respond to of 20

Sorry posted to the wrong thread. Please accept this excellent article(SEC case and decision) as an apology<vbg>[very interesting Reg S shanangans<?> DD sec.gov "The relevant strategy involved (i) purchasing for cash securities overseas which had been issued at substantial discounts and without registration pursuant to Regulation S,<(4)> (ii) hedging some or allof those securities through short selling in the United States before and/or during the 40-day restricted period under Regulation S (as discussed below), and (iii) unwinding the short positions, which involved covering the short positions using the Regulation S shares or selling the Regulation S shares in the open market in the United States after the 40-day restricted period had expired. This strategy resulted in a profit for the Fund when the Fund unwound its positions. Indeed, when the Fund took offsetting long and short positions, its profits were locked in, except in the unlikely event that conditions made it impossible for the Fund to unwind its hedged positions. Shortly after the 40-day restricted period expired, the Fund would deposit the Regulation S shares in a brokerage account and begin unwinding the positions. Initially, in a number of instances, the Regulation S shares purchased overseas were used to cover the short positions. Subsequently, the positions were unwound by selling the Regulation S shares into the United States markets and purchasing shares on the United States markets to cover the short positions. The unwinding process would continue until completion, which generally took several months. The Fund participated in 90 Regulation S deals involving the common stock of 47 issuers, and it engaged in the short selling strategy with respect to some or all of the Regulation S shares purchased in 62 of these deals. The Fund generally purchased the Regulation S shares at a 15% to 20% discount to the United States market price." Note the penalty "cease-and-desist"<lol> DD